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| | | | |  | | By Lorraine Woellert and Debra Kahn | | | | | 
Flying high off a SCOTUS win, Patrick Morrisey is back for more. | Raymond Thompson, File/AP Photo |
DISPATCH FROM THE WOKE WAR FRONT — High on a Supreme Court win against the Environmental Protection Agency, West Virginia is taking aim at a new federal foe: The Securities and Exchange Commission.
West Virginia Attorney General Patrick Morrisey has signaled that he plans to mount a legal challenge to a proposed SEC rule that would regulate investment funds marketed as socially or environmentally responsible. In a comment letter filed with the SEC this week, Morrisey and 20 other Republican state attorneys general said the securities regulator is trying to make itself “the regulator of broader social ills.” The proposed rule, they said, also runs afoul of their winning case at the high court, West Virginia v. EPA, which curbed federal authority to regulate carbon emissions from power plants. “The woke left is going full throttle in their mission to change every facet of American life,” Morrisey said, “and erode our democratic institutions to suit their liberal agenda.” At issue is an SEC labeling proposal that would require investment funds that purport to be green or socially aware to live up to those claims. While the rule can’t be challenged in court until it’s finalized, the letter from Morrisey and other conservative AGs provides an early look at the claims opponents are likely to raise. SEC’s proposed rule would add “onerous reporting requirements for investment funds with no rational justification,” Morrisey wrote. Here’s who signed the letter: Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Oklahoma, South Carolina, Texas, Utah, Virginia, Wyoming, and West Virginia. Here’s the most interesting part: The proposed rule would have an “unjustifiably negative effect on certain industries,” the AGs wrote, noting that ESG labeling intends to “highlight for investors the extent to which a fund’s portfolio is exposed to portfolio companies with higher carbon intensity.” That means, the attorneys general wrote, “industries such as mining or power generation are likely to receive less investing.” Well, maybe. “This rule would make these funds explain what they consider ESG to mean and to explain how the fund is consistent with ESG,” said Todd Phillips, director of financial regulation and corporate governance at the Center for American Progress. “That is a good thing so that investors can look at a fund and know what it means and that they’re not being lied to.” There’s a lot more to this story. Lesley Clark at POLITICO’s E&E News has the rundown.
| | | | INTRODUCING POWER SWITCH: The energy landscape is profoundly transforming. Power Switch is a daily newsletter that unlocks the most important stories driving the energy sector and the political forces shaping critical decisions about your energy future, from production to storage, distribution to consumption. Don’t miss out on Power Switch, your guide to the politics of energy transformation in America and around the world. SUBSCRIBE TODAY. | | | | | | | | GOIN’ DOWN, DOWN, DOWN — The Inflation Reduction Act, which President Joe Biden signed into law Tuesday, is chock full of mining industry benefits — including a large tax break to companies that can produce amounts of minerals central to EVs and other green energy tech. Translation: PAR-TAY! “It’s a big deal,” said Jonathan Evans, president and CEO of Lithium Americas Corp. “We’re delighted with it.” Lithium Americas is working to build the largest lithium mine in the U.S., in Thacker Pass, Nevada, and already is considering a second dig before the first one is even started. “It’s essentially creating a new industry in the U.S.,” said Marc Coltelli, e-mobility and energy leader for consulting firm EY. Democrats included the mining tax break language to counter China, a global leader in mineral supply chains central. The climate law is the latest in a string of wins for minerals players, who for years have warned the U.S. was ceding ground to China. Both the bipartisan infrastructure bill and the recently enacted bill aiding the semiconductor industry are expected to juice local demand for minerals. Read more from Jael Holzman at POLITICO's E&E News. Still, not everyone is happy with the Biggest Climate Bill in History. “We’ve been sold out,” said Dallas Goldtooth, an organizer with Indigenous Environmental Network, a coalition of grassroots groups. The environmental justice community and even some of the administration’s own advisers say communities burdened by pollution are being shortchanged by Democrats’ grand achievement. Zack Colman has details. ICYMI, the House Oversight and Government Reform Committee has an EJ hearing in Detroit next week. K STREET GOLD RUSH — Mining and battery companies are flocking to Washington on the heels of the reconciliation bill, Caitlyn Oprysko reports. — Missouri Cobalt is in the process of building a new hydrometallurgical facility near its Fredericktown, Mo., mine that it says will help produce large-scale quantities of cobalt and nickel for batteries. It retained former Rep. Filemon Vela of Akin Gump Strauss Hauer & Feld at the beginning of July to lobby on “funding regarding development and processing of critical minerals essential to electric vehicle battery manufacturing,” according to a newly filed disclosure. — Panasonic North America, whose parent company in July announced a joint venture with Toyota to buy lithium from a mine in Nevada to produce EV batteries, retained Monument Advocacy last month to lobby on domestic EV battery manufacturing and development policies. — Nevada-based battery recycling company Redwood Materials last month retained 38 North Solutions to lobby on energy and tax policy, and earlier this summer the metals and mining company Arizona Minerals Inc. retained a onetime aide to former Sen. Mike Enzi aide and a former aide to Sen. Joe Manchin at Kountoupes Denham Carr & Reid to advocate on mining and critical minerals issues.
| | | PROXY ADVISORS V. THE C-SUITE — A fight over the powerful firms that advise shareholders on corporate governance issues is escalating in Washington, where Corporate America’s leading business groups are suing the SEC for its reversal of a two-year-old rule. The SEC last month reversed Trump-era restrictions on proxy advisory firms, which guide investors on voting at annual corporate meetings. The decision has opened a new chapter in a long-running saga over the proxy system, with the U.S. Chamber of Commerce and other industry groups mounting a full-throttle legal campaign to reinstate the rules. Declan Harty has all the drama.
| | | Melanie Nakagawa, the NSC's senior director for climate and energy, will depart the White House next week after serving since day one of the Biden administration, a White House official said.. Stephanie Epner is joining the National Security Council as special adviser for climate and acting senior director for climate and energy. She most recently was senior adviser on climate change and foreign policy at the State Department, where she worked closely with Special Presidential Envoy for Climate John Kerry and also was on Secretary of State Tony Blinken's policy planning staff. And former Sen. Bill Frist (R-Tenn.) will become chair of The Nature Conservancy's board of directors. He's been on the board since 2015. — Daniel Lippman
| | | Happy Friday! Team Sustainability is editor Greg Mott, deputy editor Debra Kahn, and reporters Lorraine Woellert and Jordan Wolman. Reach us at gmott@politico.com, dkahn@politico.com, lwoellert@politico.com and jwolman@politico.com. Want more? You can have it. Sign up for the Long Game. Four days a week and still free. That’s sustainability!
| | | — The plastics cleanup project that major companies are funding in Ghana isn't working, Bloomberg reports. — Meet the Senate's new climate hawks : Brian Schatz, Martin Heinrich and Sheldon Whitehouse. — Prince William's conservation charity is coming under fire for banking with JP Morgan, one of the biggest backers of fossil fuels, the AP reports.
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